BILL NUMBER: SB 1728	CHAPTERED  09/13/00

	CHAPTER   429
	FILED WITH SECRETARY OF STATE   SEPTEMBER 13, 2000
	APPROVED BY GOVERNOR   SEPTEMBER 12, 2000
	PASSED THE SENATE   AUGUST 22, 2000
	PASSED THE ASSEMBLY   AUGUST 18, 2000
	AMENDED IN ASSEMBLY   AUGUST 10, 2000
	AMENDED IN ASSEMBLY   JUNE 19, 2000
	AMENDED IN SENATE   MAY 23, 2000
	AMENDED IN SENATE   APRIL 26, 2000

INTRODUCED BY   Senator Lewis

                        FEBRUARY 23, 2000

   An act to amend Section 41365 of the Education Code, relating to
charter schools, and declaring the urgency thereof, to take effect
immediately.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 1728, Lewis.  Charter schools:  Charter School Revolving Loan
Fund.
   Existing law creates the Charter School Revolving Loan Fund in the
State Treasury to provide loans to a chartering authority for
charter schools that are not a conversion of an existing school, or
directly to a charter school under certain conditions.  Existing law
specifies that a loan from this fund is for use by the charter school
during the period from the date the charter is granted to the end of
the fiscal year in which the charter school first enrolls pupils.
   This bill would remove the restriction requiring a charter school
to use a loan from the Charter School Revolving Loan Fund during
certain time periods.  The bill would provide that the loan to a
chartering authority for a charter school, or to a charter school,
may not exceed $250,000 over the lifetime of the charter school.  The
bill would also authorize the Superintendent of Public Instruction
to consider certain criteria when making a determination as to
approval of a charter school's loan application and give priority for
the loans to new charter schools for startup costs.
   The bill would incorporate additional changes in Section 41365 of
the Education Code proposed by SB 1759, that would become operative
only if SB 1759 and this bill are both chaptered and become effective
on or before January 1, 2001, and this bill is chaptered last.
   The bill would declare that it is to take effect immediately as an
urgency statute.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 41365 of the Education Code is amended to read:

   41365.  (a) The Charter School Revolving Loan Fund is hereby
created in the State Treasury.  The Charter School Revolving Loan
Fund shall be comprised of federal funds obtained by the state for
charter schools and any other funds appropriated or transferred to
the fund through the annual budget process.  Funds appropriated to
the Charter School Revolving Loan Fund shall remain available for the
purposes of the fund until reappropriated or reverted by the
Legislature through the annual Budget Act or any other act.
   (b) Loans may be made from moneys in the Charter School Revolving
Loan Fund to a chartering authority for charter schools that are not
a conversion of an existing school, or directly to a charter school
that qualifies to receive funding pursuant to Chapter 6 (commencing
with Section 47630) that is not a conversion of an existing school,
upon application of a chartering authority or charter school and
approval by the Superintendent of Public Instruction.  Money loaned
to a chartering authority for a charter school, or to a charter
school, pursuant to this section shall be used only to meet the
purposes of the charter granted pursuant to Section 47605.  The loan
to a chartering authority for a charter school, or to a charter
school, pursuant to this subdivision shall not exceed two hundred
fifty thousand dollars ($250,000) over the lifetime of the charter
school.  A charter school may receive money obtained from multiple
loans made directly to the charter school or to the school's
chartering authority from the Charter School Revolving Loan Fund, as
long as the total amount received from the fund over the lifetime of
the charter school does not exceed two hundred fifty thousand dollars
($250,000).  This subdivision does not apply to a charter school
that obtains renewal of a charter pursuant to Section 47607.
   (c) The Superintendent of Public Instruction may consider all of
the following when making a determination as to the approval of a
charter school's loan application:
   (1) Soundness of the financial business plans of the applicant
charter school.
   (2) Availability to the charter school of other sources of
funding.
   (3) Geographic distribution of loans made from the Charter School
Revolving Loan Fund.
   (4) The impact that receipt of funds received pursuant to this
section will have on the charter school's receipt of other private
and public financing.
   (5) Plans for creative uses of the funds received pursuant to this
section, such as loan guarantees or other types of credit
enhancements.
   (6) The financial needs of the charter school.
   (d) Priority for loans from the Charter School Revolving Loan Fund
shall be given to new charter schools for startup costs.
   (e) Commencing with the first fiscal year following the fiscal
year the charter school receives the loan, the Controller shall
deduct from apportionments made to the chartering authority or
charter school, as appropriate, an amount equal to the annual
repayment of the amount loaned to the chartering authority or charter
school for the charter school under this section and pay the same
amount into the Charter School Revolving Loan Fund in the State
Treasury.  Repayment of the full amount loaned to the chartering
authority shall be deducted by the Controller in equal annual amounts
over a number of years agreed upon between the loan recipient and
the State Department of Education, not to exceed five years for any
loan.
   (f) (1) Notwithstanding other provisions of law, a loan may be
made directly to a charter school pursuant to this section only in
the case of a charter school that is incorporated.
   (2) Notwithstanding other provisions of law, in the case of
default of a loan made directly to a charter school pursuant to this
section, the chartering authority shall, also, be liable for
repayment of the loan.
  SEC. 1.5.  Section 41365 of the Education Code is amended to read:

   41365.  (a) The Charter School Revolving Loan Fund is hereby
created in the State Treasury.  The Charter School Revolving Loan
Fund shall be comprised of federal funds obtained by the state for
charter schools and any other funds appropriated or transferred to
the fund through the annual budget process.  Funds appropriated to
the Charter School Revolving Loan Fund shall remain available for the
purposes of the fund until reappropriated or reverted by the
Legislature through the annual Budget Act or any other act.
   (b) Loans may be made from moneys in the Charter School Revolving
Loan Fund to a chartering authority for charter schools that are not
a conversion of an existing school, or directly to a charter school
that qualifies to receive funding pursuant to Chapter 6 (commencing
with Section 47630) that is not a conversion of an existing school,
upon application of a chartering authority or charter school and
approval by the Superintendent of Public Instruction.   Money loaned
to a chartering authority for a charter school, or to a charter
school, pursuant to this section shall be used only to meet the
purposes of the charter granted pursuant to Section 47605.  The loan
to a chartering authority for a charter school, or to a charter
school, pursuant to this subdivision shall not exceed two hundred
fifty thousand dollars ($250,000) over the lifetime of the charter
school.  A charter school may receive money obtained from multiple
loans made directly to the charter school or to the school's
chartering authority from the Charter School Revolving Loan Fund, as
long as the total amount received from the fund over the lifetime of
the charter school does not exceed two hundred fifty thousand dollars
($250,000).  This subdivision does not apply to a charter school
that obtains renewal of a charter pursuant to Section 47607.
   (c) The Superintendent of Public Instruction may consider all of
the following when making a determination as to the approval of a
charter school's loan application:
   (1) Soundness of the financial business plans of the applicant
charter school.
   (2) Availability to the charter school of other sources of
funding.
   (3) Geographic distribution of loans made from the Charter School
Revolving Loan Fund.
   (4) The impact that receipt of funds received pursuant to this
section will have on the charter school's receipt of other private
and public financing.
   (5) Plans for creative uses of the funds received pursuant to this
section, such as loan guarantees or other types of credit
enhancements.
   (6) The financial needs of the charter school.
   (d) Priority for loans from the Charter School Revolving Loan Fund
shall be given to new charter schools for startup costs.
   (e) Commencing with the first fiscal year following the fiscal
year the charter school receives the loan, the Controller shall
deduct from apportionments made to the chartering authority or
charter school, as appropriate, an amount equal to the annual
repayment of the amount loaned to the chartering authority or charter
school for the charter school under this section and pay the same
amount into the Charter School Revolving Loan Fund in the State
Treasury.  Repayment of the full amount loaned to the chartering
authority shall be deducted by the Controller in equal annual amounts
over a number of years agreed upon between the loan recipient and
the State Department of Education, not to exceed five years for any
loan.
   (f) (1) Notwithstanding other provisions of law, a loan may be
made directly to a charter school pursuant to this section only in
the case of a charter school that is incorporated.
   (2) Notwithstanding other provisions of law, in the case of
default of a loan made directly to a charter school pursuant to this
section, the charter school shall be solely liable for repayment of
the loan.
  SEC. 2.  Section 1.5 of this bill incorporates amendments to
Section 41365 of the Education Code proposed by both this bill and SB
1759.  It shall only become operative if (1) both bills are enacted
and become effective on or before January 1, 2001, (2) each bill
amends Section 41365 of the Education Code, and (3) this bill is
enacted after SB 1759, in which case Section 1 of this bill shall not
become operative.
  SEC. 3.  This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect.  The facts constituting the necessity are:
   In order to allow charter schools to begin using loans from the
Charter School Revolving Loan Fund beyond the first year in which the
charter schools first enroll pupils and to thereby continue
educating pupils enrolled in those schools, it is necessary that this
act take effect immediately.
